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Procedural deviations in Franklin e-voting, only 38% turnout: report
1 min read.Updated: 20 Jan 2021, 11:02 PM ISTNeil Borate
Voters in the schemes approved the winding up by a majority of over 96% in all the schemes, the report showed
The observer further noted that the vote was framed such that approval by simple majority is required rather than the threshold of 75% that is required in case of winding up of a company
A regulatory observer for the electronic voting on the winding up of six Franklin Templeton mutual fund schemes has criticized some aspects of the voting process.
The report from T.S. Krishnamurthy, appointed by the Securities and Exchange Board of India (Sebi) for the e-voting, showed 115,419 votes were cast, or roughly 38% of the schemes’ 300,000-odd investors. Voters in the schemes approved the winding up by a majority of more than 96% in all the schemes, the report showed.
According to the report, Franklin Templeton Asset Management (India) Pvt. Ltd had agreed to broadly follow the Companies Act 2013 and the Companies (Management and Administration) Rules 2014. The Act specifies one vote per fully paid up share of a company.
“If this rule had been strictly applied, the unit-holders would have been entitled to exercise one vote per unit on the cut-off date. However, in this case, each unit-holder has been given only one vote irrespective of the number of units held as on the cut-off date," the report said.
Mint has seen a copy of the report.
The report further said the Franklin Templeton voting required approval by a simple majority, rather than the threshold of 75% required in case of winding up a company.
The observer’s report also pointed at deviations on disclosure of interest by directors, key managerial personnel and their relatives, and the failure to provide an opportunity to inspect relevant documents.
Queries emailed to Franklin Templeton remained unanswered till press time.
Franklin Templeton froze redemptions from the six schemes on 23 April in the wake of a severe liquidity crunch. As on Wednesday, these schemes had assets of around ₹26,000 crore, receiving ₹13,789 crore till 15 January, with five out of the six schemes turning cash-positive.